earnings yield


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Earnings yield

The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. We often look at earnings yield because this avoids the problem of zero earnings in the denominator of the price-earning ratio.

Earnings-Price Ratio

The annual earnings of a security per share at a given time divided into its price per share. It is the inverse of the more common price-earnings ratio. Often, the earnings one uses are trailing 12-month earnings, but some analysts use other forms. The earnings-price ratio is a way to help determine a security's stock valuation, that is, the fair value of a stock in a perfect market. It is also a measure of expected, but not realized, growth. It may be used in place of the price-earnings ratio if, say, there are no earnings (as one cannot divide by zero). It is also called the earnings yield or the earnings capitalization ratio.

earnings yield

earnings yield

NET PROFIT after tax per ordinary share (EARNINGS PER SHARE) of a JOINT-STOCK COMPANY for a given ACCOUNTING PERIOD, expressed as a percentage of the current market price per share. For example, if profit after tax was £2 per share and the market price per share was £5 then the earnings yield would be 40%. Earnings yield is the mirror image of the PRICE-EARNINGS RATIO.

Earnings yield depends upon DIVIDEND YIELD and DIVIDEND COVER. For example, if dividend yield was 20% and the dividend was covered twice over then the earnings yield would be 20% x 2 or 40%.

earnings yield

NET PROFIT after tax per ordinary share (EARNINGS PER SHARE) of a JOINT-STOCK COMPANY for a given accounting period, expressed as a percentage of the current market price per share. For example, if profit after tax was £1 per share and the market price per share was £10, then the earnings yield would be 10%. Earnings yield is the mirror image of the PRICE-EARNINGS RATIO.

Earnings yield depends upon DIVIDEND YIELD and DIVIDEND COVER. For example, if dividend yield was 5% and the dividend was covered twice over then the earnings yield would be 5% x 2, or 10%.

References in periodicals archive ?
The current rate of return of the market can be computed by taking the earnings yield, which is simply the inverse of market P/E of 19.
They address the bond-stock earnings yield differential model based on the 1987 US stock market crash and apply it to markets like Japan and the US; discuss the short window 2007-2009 crash period in the US, China, and Iceland; and compare the bond-stock earnings yield differential model with Campbell and ShillerAEs high price-earnings models.
But Goldman notes in its second-half outlook that the S&P 500 could end the year even higher if the gap between the S&P 500 earnings yield and 10-Year Treasury yield narrows to 300 by year end, which could happen if the 10-year Treasury yield rises to 2.
BANKING AND CREDIT NEWS-May 7, 2015-Georgia Credit Union fees, earnings yield USD130m in member benefits
Second, the company's EBIT as a proportion of its enterprise value; this is akin to earnings yield adjusted for capital structure.
While you're likely to be able to use one or more of the above methods, bear in mind the possibility of resorting to the basic earnings yield (earnings per share / share price) as a suitable surrogate for ke.
Profits as a percentage of the S&P 500's price, known as earnings yield, total 5.
The current earnings yield of the KASB Universe is 10.
Descriptive statistics on earnings yield and price relatives computed from yearly data for the period 1998-2008 at measurement intervals ranging from one to four years are reported in Table 1.
The S&P 500's earnings yield -- a reverse of the P/E ratio -- currently stands at 7.
The prospective earnings yield on the FTSE World Index continues to rise and is now above the yield on sub investment grade corporate bonds.
In The Little Book that Beats the Market , Greenblatt talks of a simple way to beat the market using only two fundamental variables -- return on capital ( ROC) and earnings yield ( EY).